Frequently asked questions about health insurance

How does a PPO plan work?

As a member of a PPO (Preferred Provider Organization) plan, the prices for services will encourage you to use the insurance company’s preferred network of doctors and hospitals. With a PPO plan, services provided by a doctor outside of your network are generally covered at a lower percentage than services provided by an in-network doctor. Generally, you will not be required to choose a primary care physician, but you will be able to see in-network doctors and specialists at your own discretion.

You will most likely have to pay an annual deductible before the insurance company begins to cover your medical bills. You may also have a copay for some services or a percentage of the total charges.

How does an HMO plan work?

HMO plans (Health Management Organizations) generally allow members to have lower out-of-pocket health care expenses, but they also offer less flexibility in doctor or hospital choices than other health insurance plans. As a member of an HMO, you will be asked to choose a Primary Care Physician (PCP) you should see before being referred to a specialist.

With an HMO, you’ll likely have coverage for a wide range of preventive health care services, some even offer gym discounts. You may not have to pay a deductible before coverage begins, and your copays are usually minimal. HMOs generally do not offer any coverage for services rendered by out-of-network providers or for services rendered without proper referral from your Primary Care Physician (PCP).

What is the difference between in-network and out-of-network providers?

An in-network provider is one who has a contract with the health insurance company to provide services to plan members for specific, pre-negotiated rates. If you go to a doctor or other provider within the network, the amount you will have to pay will be less than if you go to an out-of-network provider. Although there are some exceptions, the insurance company will pay less or nothing for services you receive out of network.

How does the compensation plan work?

A traditional Indemnity plan offers a great deal of freedom in choosing which doctors and hospitals to use, but it will likely mean higher out-of-pocket costs and more paperwork.

With an Indemnity plan, you can see the doctors or specialists you want, without the need for referrals. Although you can choose to get most of your basic care from a single doctor, your insurance company will not require you to choose a primary care doctor.

However, this kind of freedom can be expensive. You will likely have to pay an annual deductible before the insurance company will start paying your claims. Once your deductible has been met, the insurance company will generally pay your claims at a fixed percentage of the “usual, customary, and reasonable (UCR) rate” for service. The UCR rate is the amount that health care providers in your area typically charge for a particular service.

An Indemnity plan may also require payment in advance for services and then file a claim for reimbursement.

How does an HSA work?

HSAs and HSA-eligible health insurance plans are a great way for people to control their health care dollars. Here are the basics:

• An HSA is a tax-advantaged savings account that can be used in conjunction with an HSA-eligible high-deductible health insurance plan to pay for qualified medical expenses.
• Choosing an HSA-eligible plan can help you save money. Generally, the monthly premium for an HSA-eligible high-deductible plan is less expensive than the monthly premium for a lower-deductible plan.
• Contributions to an HSA can be made on a pre-tax basis, up to certain annual limits.
• HSA funds may be invested at your discretion in a qualified financial institution of your choice. Unused funds remain in the account and increase in interest from year to year, tax-free.
• Not all high deductible plans are eligible to be used in conjunction with an HSA.

What is a copay?

A “copayment” or “copay” is a charge you pay for a specific medical service or supply. You can think of this as the “office visit fee.” If your plan requires a $15 copay, that’s the amount you pay for an office visit and the insurance company pays the rest of the charges.

What is a deductible?

A “deductible” is a specific dollar amount that your health insurance company may require you to pay out of pocket each year. before your health insurance plan starts making claims payments. Most Indemnity and PPO plans require you to meet the annual deductible before making payments.

What is coinsurance?

Coinsurance is the amount you must pay for a medical claim, in addition to any copayments or deductibles. For example, if there is a 20% coinsurance requirement, then a $100 medical bill would cost you $20 and the insurance company would pay the remaining $80 until you meet the total annual out-of-pocket requirement.

Finding the right health insurance plan can be overwhelming. Each state has different rules and providers. Different providers can have very different health insurance ratings and health insurance premiums vary depending on the deductible, age and health of the applicant and the insurance company. Try to find an online health insurance quote provider for your health insurance in your state. These services are often free and may also offer the support of experienced health insurance advisers to help you understand options for you as an individual or for family health insurance.